Yes, it includes spending money. Our loose plan is that my husband gets $40 to do with as he will and I get the rest :) Just kidding, but not entirely. We are going to try a literally cash only method this month, not using a card for anything. This 300 also includes money for me to pay the babysitter, which has been from 60-90/week, depending on how many days I ask her to come.

I was going to make the same comment about $300 a week in "gas/groceries/spend" is a lot, but electrasmom beat me to it. I would suggest that you need to break this down more specifically....how much in allowances for each of you, how much in groceries, how much in gas, how much in sitters, etc. When you are cutting your budget as close as you are, you really need to track the little things closely. $20 a week over a 4.5 week month will eat up over half of your $135 'cushion'. And it's really easy to spend $20 in a week and not know where it went.